Viewpoints

Earth Day: To Save the Planet, End the Subsidies That Impede Innovation

Apr 22, 2016

There continues to be waves of environmental and particularly climate change bad news. This past March was the warmest on record, according to the National Oceanic and Atmospheric Administration (NOAA). Meanwhile over 90% of the coral Great Barrier Reef has been bleached, reports The Washington Post. At the same time the Greenland ice sheet is melting far earlier than normal, reports Slate.

The new United Nations Paris Agreement on climate change, in which countries pledge to limit temperature rise to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius, is a critical first step in stemming the tide of environmental destruction. But there is disturbing information, also reported by The Washington Post, indicating that temperatures may nonetheless rise to 2.7 degrees Celsius to as high as 3.5 degrees Celsius.

Meanwhile the same article reports some good news in that energy emissions growth was flat in 2015, even as the global economy grew. But that may be temporary relief. Cheap fuel has spurred strong demand for fuel-guzzling SUVs and trucks, helping to literally drive profits for automakers like GM, according to a story in the Fort Worth Star-Telegram.

But to save the planet, and make the Paris Agreement work, requires eliminating the enormous environmental destruction subsidies that discourage businesses and consumers from going green. Their presence is distorting the marketplace and stifling the market for innovative, low-carbon, low-footprint, and less toxic and wasteful technologies, materials, and best practices. It is why we do not have enough electric vehicles and mass transit. It also is why virtual travel and working have not lived up to their potential, and as result has restrained the market for unified communications and collaborations tools that enable them.

Here are just four examples of these subsidies:

No penalty for throwaway, toxic products. The environmental costs incurred in the production, transportation/distribution, use, upkeep, and disposal of products are not reflected in the pricetags. Canadian Liberal Member of Parliament Mike Bossio suggested putting the costs at the producer level, thereby encouraging more (and demand for) sound goods, like Herman Miller’s sustainable office chairs.

Energy, commercial and residential property, and transportation prices do not include total environmental costs, including land use. This last element is fundamentally critical, for without trees, wetlands, open space, and arable land our species and others cannot exist. But the permanent costs of destroying them have not been factored in the pricetags, resulting in continuing sprawl. This has led to, for example, the ugly and counterproductive specter of solar sprawl whose green benefits are being offset by the open space loss costs.

Continued fuel and vehicle use subsidies. Examples include fossil fuels, as outlined in this The Guardian article and the U.S. parking tax benefit, as cited by this report by the Transit Center and the Frontier Group.

The transportation “free ride”? Transportation should be treated like a utility, where all costs, including environmental/land use) are billed to those who create the demand. Businesses, institutions, and consumers make site selection and mode choices that impact transportation demand and costs. But is the current system of gas and excise taxes, tolls, and fares, and property and general taxation accurately and fairly determining and allocating costs?

No one wants to pay higher costs. But no one wants to pay higher taxes that will be the inevitable result when we are faced with offsetting escalating environmental losses. Like having to harden road, sewer, and water infrastructure and eventually build seawalls in my tiny Jersey Shore community, just to use one micro-example.

Instead shifting environmental costs to users would permit taxes to stabilize or decline. The environmental fee proceeds can be reinvested in brownfield site cleanup to enable their reuse, and in expanding mass transit systems. Leveling the playing field between sustainable and non-sustainable goods and practices will pay the dividends of generating more demand for green solutions that will lead to higher economic growth.

This strategy is the only way we can fulfill the promise of Earth Day, and the Paris Agreement. It is the best way to ensure a livable planet for generations to come.

Brendan Read

Brendan Read is Senior Industry Analyst with over 25 years’ experience covering business, communications, staffing, and technology. He has worked in, prepared reports, and blogged on a wide range of topics including customer contact, CX, CRM, IoT, social media, supply chain, and BC/DR. He also has backgrounds in construction, manufacturing, materials, resource extraction, site selection, and transportation. He examines the broad economic, environmental, innovation, political, and social mega trends, and their impacts on businesses, markets, and society.

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